Settlement of the Terms

Before negotiating terms of deal purchaser by his own way is making preliminary enquiries in connection with title of the land. This makes delay in approval of draft of agreement for sale. Under this condition purchaser is paying token amount on trust. Seller is also giving receipt for the same. This receipt-(vachan chithee) may not have great value in terms of law but in land transactions this creates moral liability on seller. This vachan chithee is very useful if middle man is strong in position as a local leader. In short, vachan chithee prevents the seller from negotiating with another buyer while he is negotiating with one buyer. The seller shall not negotiate with or agree to sell the property to any other buyer for a fixed period from the date of the vachan chithee and if within that period the negotiations are not complied, under the circumstances seller is open to negotiate with others.

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While purchasing land buyer is putting lot of emphasis on land record. Basically Land revenue code is created for recovering land revenue so as far as evidentiary value concern as per section 35 of the Indian Evidence Act, the entries in record of right, registered of mutation etc. are evidence of the fact. The entry in this record has high degree of evidentiary value but is not the conclusive evidence. The entry in these records creates no title. Under this circumstance, Revenue officer thinks that creating these records is merely a formality to be observed as a legal necessity.  They feel that it is none of the business of the Revenue Officer to think of the legality or illegality of any transfers. This issue is to be decided by   the competent au­thorities and the Courts.  In this background they certify illegal transfers also. One must not forget that the entries made in record of rights, registered of mutation etc. are presumed to be true until the contrary is proved. Where presumption is rebutted by evidence, entry loses its evidentiary value. After considering all these, we have to come to conclusion that success in land transactions is based on trust.

Seller should honestly disclose any material defect in the property and the title thereto and he should not avoid executing deed of conveyance at the last minute. On the other hand purchaser should not create false reasons for making delay in payment of price of property. While negotiating terms of deal parties are fixing duties and rights of seller and buyer. They should be in the nature given below.  In general,

the seller’s duties are;

  1. to produce documents of title in his possession to the purchaser for examination,
  2. to answer requisitions,
  3. to execute a deed of conveyance on payment of the price, -
  4. to take care of the property pending delivery of possession to the purchaser,
  5. to give possession of the property on completion of sale.
  6. to pay all taxes and other outgoings and encumbrances up to the date of sale.
  7. to deliverer the title deeds to the purchaser on completion.
  8. to give covenant for title.

The seller's rights are;

  1. to receive rent of the property until delivery of possession to the purchaser,
  2. to receive the price on completion of sale and
  3. to have a charge on the property for unpaid price.

The purchaser’s duties are;

  1. to disclose to the vendor the nature or extent of the vendor's interest in the property not known to the vendor and known to the purchaser,
  2. to pay the price on completion,
  3. to pay all taxes and outgoings of the property after the completion of sale.

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  1. to receive all rents of the property after completion of sale,
  2. to have a charge on the property for monies paid to the seller if the seller improperly fails to complete the sale.